Key insights

• 💵 US controls global trade transactions often routed through US-based banks, giving leverage and influence
• 🌍 US leverages control of global reserve currency as a geopolitical tool, imposing extensive trade sanctions
• 💲 Countries seeking alternatives to US dollar due to sanctions, as seen with Russia and Swift system
• 🇷🇺 Russia's resilience shown by trading with China and India, bypassing US dollars and Swift system, alongside BRICS efforts to counteract US dollar dependence
• 🏦 China and Russia increasing gold reserves to reduce US dollar dependence, discussing potential new payment messaging system at BRICS summit
• 🔀 Proposed alternative to US-dominated Swift payment system by BRICS could reduce America's global influence

Q&A

• What are BRICS countries proposing as an alternative to the US-dominated Swift payment system?

  BRICS countries are proposing an alternative to the US-dominated Swift payment system to avoid being affected by US sanctions. This alliance, which includes Russia and other countries, has the potential to significantly reduce America's global influence.

• Why have China and Russia been increasing their gold reserves?

  China's Central Bank has been accumulating gold to reduce dependence on the US dollar, while Russia has also been increasing its gold purchases, bringing gold to 31.5% of the country's total reserves. Increased gold holdings weaken the BRICS nations' dependence on the US dollar for global trade. The BRICS summit has also discussed alternative international payment solutions, including a potential new payment messaging system called BRICS Pay.

• How has Russia responded to heavy US sanctions?

  The US imposed heavy sanctions on Russia, causing a significant impact on its economy. However, Russia has shown resilience by trading with China and India, bypassing US dollars and the Swift system. Additionally, BRICS nations are working together to counteract the need for transacting in US dollars and have been utilizing alternative systems for transactions, such as CI PS and SPFS.

• What are the implications of US trade sanctions on Iran?

  The US has imposed extensive trade sanctions on Iran, including restrictions on dollar-denominated transactions and oil exports, using its control of the world's financial system to shape geopolitical outcomes. These sanctions are linked to concerns over Iran's nuclear program, missile development, and support for terrorism. The prohibition on dollar transactions has limited Iran's global financial access and drastically reduced its oil exports at different periods.

• Why are many countries moving away from the US dollar?

  Many countries, driven by Russia and China, are moving away from the US dollar due to its dominance in international trade, which gives the US significant leverage. Most global trade transactions occur in USD, enabling the US to exert control and influence. Additionally, the US wields power through its control over trade transactions that are often routed through US-based banks.

• What is the Morning Brew?

  The Morning Brew is a free, entertaining business newsletter with over 4 million readers. It offers 5-minute daily reads and supports the channel.

• 00:00 Many countries are moving away from the US dollar, driven by Russia and China, due to the US currency's dominance in international trade and the power it gives the US. Transactions, especially in global trade, are mostly conducted in USD, giving the US significant leverage. The US also wields power through its control over trade transactions that are often routed through US-based banks.
• 02:13 The US has imposed extensive trade sanctions on Iran, including restrictions on dollar-denominated transactions and oil exports, using its control of the world's Financial system to shape geopolitical outcomes.
• 04:28 The Morning Brew is a free, entertaining business newsletter with 5-minute daily reads; it has over 4 million readers and supports the channel. The US uses its reserve currency status to impose financial sanctions, but this may lead to countries seeking alternatives, as seen with Russia and the Swift system.
• 06:31 The US imposed heavy sanctions on Russia, causing a significant impact on its economy. However, Russia has shown resilience by trading with China and India, bypassing US dollars and Swift system. BRICS nations are working together to counteract the need for transacting in US dollars.
• 08:53 China and Russia have been significantly increasing their gold reserves to reduce dependence on the US dollar and potentially create a new currency system among BRICS nations. The BRICS summit discussed alternative international payment solutions, including a potential new payment messaging system called BRICS Pay.
• 11:19 BRICS countries are proposing an alternative to the US-dominated Swift payment system to avoid being affected by US sanctions. The alliance, if successful, could significantly reduce America's global influence.